VMware server is not the best Virtualization implementation for SME Server. Xen is a much better solution as it provides much better hardware utilization. For OSs optimized for Xen (i.e., modified to run as a paravirtualized Virtual Machine), you can expect near bare metal performance.
VMware Server is VERY hardware intensive. While the UI is more polished than Xen, you are going to give up a great deal in hardware utilization.